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THE SUPREME COURT OF NEW HAMPSHIRE

___________________________

Department of Labor

No. 98-180

APPEAL OF SMITHFIELD DODGE, INC. d/b/a NISSAN OF EXETER

(New Hampshire Department of Labor)

March 24, 2000

Mark F. Sullivan, of Exeter, by brief and orally, for the
petitioner.

Philip T. McLaughlin, attorney general (Wynn E. Arnold,
senior assistant attorney general, on the brief and orally), for the State, as amicuscuriae.

William J. Ouellette, prose, filed no brief.

PER CURIAM. The petitioner, Smithfield Dodge, Inc. d/b/a Nissan of Exeter,
appeals a decision of the New Hampshire Department of Labor (DOL) finding that the
petitioner fired William J. Ouellette in violation of the New Hampshire Whistleblowers'
Protection Act. See RSA ch. 275-E (1999) (amended 1999). We vacate and remand.

The following facts were adduced at the DOL hearing. The petitioner hired
Ouellette as its service manager in August 1997. Approximately one week after being hired,
Ouellette was asked to label and mail recall notices. Ouellette initially refused because,
in his experience, he had never seen a dealership mail recall notices. Ouellette discussed
his concerns with the general manager who, according to Ouellette, admitted that the
recalls were a ruse to drum up additional business. Ouellette labeled approximately 1500
of the 3500 cards, which were later mailed. Approximately one week later, the petitioner
terminated Ouellette. Ouellette filed a complaint with the DOL alleging a violation of
section three of the Whistleblowers' Protection Act, see RSA 275-E:3 (1999),
because he was fired for refusing to send out the false recall notices. Following a
hearing, the DOL found that "the claimant is seeking protection under the wrong
section of the Whistleblowers' Protection Act," and ruled that the petitioner
violated RSA 275-E:2 (1999). The petitioner's motion for rehearing was denied, and this
appeal followed.

The petitioner contends that the DOL erred by: (1) basing its decision on
RSA 275-E:2 (section two) when Ouellette's complaint alleged a violation of RSA 275-E:3
(section three); (2) failing to address the petitioner's valid business reason for
terminating Ouellette; and (3) finding that the petitioner violated RSA chapter 275-E.
Because we find that the DOL erred in basing its decision on section two, we vacate and
remand.

Our standard of review is governed by RSA 541:13 (1997), which states:

Upon the hearing the burden of proof shall be upon the party seeking to
set aside any order or decision of the commissioner to show that the same is clearly
unreasonable or unlawful, and all findings of the commission upon all questions of fact
properly before it shall be deemed to be prima facie lawful and reasonable; and the order
or decision appealed from shall not be set aside or vacated except for errors of law,
unless the court is satisfied, by a clear preponderance of the evidence before it, that
such order is unjust or unreasonable.

The petitioner argues that the DOL violated its own rules by finding a
violation of section two when Ouellette's complaint alleged only a violation of section
three. While the petitioner makes a passing reference in its brief to alleged violations
of its due process rights under the State Constitution, the petitioner has not preserved
this argument for appellate review. In its motion for rehearing, it did not articulate a
State constitutional claim. SeeAppeal of Coffey, 144 N.H. ___, ___, 744
A.2d 603, 605-06 (1999). We will therefore examine only whether the DOL violated its own
rules in reaching its decision.

The Administrative Procedure Act requires an administrative agency to
follow its own rules. SeeAppeal of Gielen, 139 N.H. 283, 288, 652 A.2d 144,
147 (1994). At the time of the petitioner's hearing, the DOL's rules stated:

Hearings before a hearing officer shall be scheduled for the determination
of specified issues duly noticed for hearing. The department shall expand the scope of a
scheduled hearing if notice of the added issues with necessary documentation is given to
all parties at least 14 calendar days prior to the assigned hearing date. Issues may be
added at any time without such notice with the consent of all parties.

N.H. Admin. Rules, Lab 204.01 (effective November 16, 1997; expired
March 16, 1998). Additionally, Rule 204.06(c) required that "[t]he hearing officer
shall at the outset of the hearing record the place, time and date and issues of the
hearing together with the names of those parties making appearances." N.H. Admin.
Rules, Lab 204.06(c) (effective November 16, 1997; expired March 16, 1998).

Ouellette filled out a whistleblowers' complaint alleging he was fired for
refusing to execute an illegal directive. The DOL sent the petitioner a cover letter
notifying it that a complaint was filed against it pursuant to RSA chapter 275-E, and
included a copy of the complaint and a two-page statement by Ouellette. At the start of
the hearing, the hearing officer set forth the issues as follows: "Mr. Ouellette
alleges that he was illegally discharged on August 20, 1997, in violation of RSA 275-A,
Section 3."

Section three states:

No employer shall discharge, threaten or otherwise discriminate against
any employee regarding such employee's compensation, terms, conditions, location, or
privileges of employment because the employee has refused to execute a directive which in
fact violates any law or rule adopted under the laws of this state, a political
subdivision of this state, or the United States.

(a) The employee, in good faith, reports or causes to be reported,
verbally or in writing, what the employee has reasonable cause to believe is a violation
of any law or rule adopted under the laws of this state, a political subdivision of this
state, or the United States . . . .

Thus, section two does not require an actual violation of a law or rule
but only that an employee reasonably believe that such a violation has occurred, seeAppeal of Osram Sylvania, 142 N.H. 612, 618, 706 A.2d 172, 175 (1998), while
section three requires that the directive that the employee has refused to follow is in
fact a violation of a law or rule.

At no point prior to the hearing did anyone allege that the petitioner had
violated section two in addition to or separate from the alleged violation of section
three. This allegation was first made during the petitioner's cross-examination of
Ouellette when Ouellette testified that he believed he was fired not for refusing to
follow an illegal directive, but because he reported an activity that he believed to be
illegal. Even though this testimony may support the DOL's finding that the petitioner
violated section two, the petitioner, under the DOL's own rules, was entitled to know that
it should be prepared to defend against allegations that it violated section two. The
petitioner was not given notice that Ouellette was alleging a violation of section two.
Discovering on cross-examination a new possible violation of a separate section of the
statute does not comply with Rule 204.01.

The State contends that the complaint, cover letter, and Ouellette's
statement provided the petitioner notice that it was accused of violating both section two
and section three. We disagree. The only section of the statute specifically referred to
was section three. The attached statement set forth general facts relating to the
discharge, but did not allege that Ouellette was fired because he reported a
directive he believed was illegal rather than that he was fired because he refused
to follow an illegal directive.

The State also argues that Ouellette, who appeared prose at
the hearing, should not be required to know the difference between the two sections of the
statute when he filled out the preprinted complaint form. This argument is unavailing. Prose litigants have been held "responsible for knowing the content of the court
rules applicable to their actions," DeButts v. LaRoche, 142 N.H. 845, 847, 711
A.2d 877, 878 (1998), and are likewise responsible for knowing what section of the statute
corresponds to the violation they are alleging.

Finally, the State contends that section two and section three are
substantively equivalent in this case. As evidence of this, the State points to the
petitioner's failure to explain what additional evidence it would have brought forth to
defend a section two violation as opposed to a section three violation, and therefore
contends that no material prejudice resulted from any error. Under the facts of this case,
however, we hold that where the petitioner was charged with violating one section of a
statute but found liable under another, the petitioner was materially prejudiced.

This case is distinguishable from State v. Homo, 132 N.H. 514, 516,
567 A.2d 540, 541-42 (1989). There, even though a complaint alleged a violation of one
section of a statute, a conviction under another section was proper because it was clear
at trial that the State was in fact proceeding under the other section and the defendant
did not object. Thus, the complaint was constructively amended. Homo, 132 N.H. at
516, 567 A.2d at 541-42. Here, however, it is not clear from the record that Ouellette was
in fact proceeding under section two nor that the petitioner was aware of this and
acquiesced. We therefore hold that the petitioner was materially prejudiced by the lack of
notice of an alleged violation of section two.

Simply because the DOL found that Ouellette could have brought a
successful complaint against the petitioner under section two does not mean that the DOL
could so find when such a violation was never alleged. We therefore vacate and remand to
the DOL for further proceedings.

Vacated and remanded.

THAYER, J., sat but, on administrative leave, did not participate; NADEAU,
J., did not sit; the others concurred.